The popularity of the Internet is driving requirements for secure and segregated IP interconnection of remote sites. One solution is to use the underlying network supporting virtual connections i.e. Frame Relay or ATM. These virtual connections can be separated by provisioning to form a Virtual Private Network which is Layer 3 protocol transparent. However if the underlying network is IP itself, as is the case with the Internet then IP tunnels can be used to interconnect two or more sites. Any other known layer 2 VPN (Virtual Private Network) solution used in the prior art requires a centralized server where all CPE (Customer Premises Equipment) and IP devices have to be statically or dynamically registered, like LANE (Local-Area-Network Emulation), NHRP (Next-Hop-Routing-Protocol) or Classical IP.
A need exists for building IP based virtual private LAN segments (sharing one IP subnet) with complete transparency regarding TCP/IP, site-independent CPE configuration and with dynamic stateless tunnels to optimally forward unicast traffic based on routing and policy per VPLS. VPLS with different Identifiers can use overlapping IP subnets. With the method of the present invention, a centralized server or a list of CPE devices configured for each VPN is not required.